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Saturday, June 19, 2010

Kosmos, Forbes Magazine, and the Scramble for Ghana’s Oil

The recent report by the right-wing US-based Forbes magazine that Ghana was the 9th “worst-managed” economy in the world is yet another reminder of the insidious forces at work against Ghana as the scramble for the country’s oil intensifies and big-business enlists the services of big-media to do what they do best: Demean and conquer.

One need only connect the dots for a number of seemingly unconnected events to see a pattern emerge of a conspiracy by foreign corporate interests to do Ghana in over its oil. For years, the US media and successive US governments have been among the loudest cheerleaders for Ghana’s socio-economic accomplishments, but all that seemed to have changed recently when the Ghanaian government dared challenge the decision by Texas-based Kosmos to sell its shares in Ghana’s Jubilee oil fields to fellow American company Exxon without the fiduciary consent of the Ghanaian government, the custodian of the nation’s natural resources. Kosmos’ intended sale was announced on October 12, 2009, a day after China’s National Offshore Oil Company’s interest in Jubilee was made public. Thus, overnight, Ghana found itself in the middle of the new scramble for Africa.

A June 2008 article in the Foreign Policy Magazine of the American Council on Foreign Relations had cast this scramble as “a race between China and the United States to secure [Africa’s] oil supplies”. Companies like Kosmos and Exxon represent the poisonous arrowheads of this new scramble.

As the Ghanaian government pressed its case against the sale, Kosmos and Exxon began playing the role of victim in the US media. On February 18, 2010, The Wall Street Journal, not coincidentally, published an editorial titled “Why Africa is Poor - Ghana beats up on its biggest foreign investors”. (Note the word “biggest” – not just any foreign investor). Sadly, the gullible Ghanaian media eagerly propagated this planted “editorial” as if it was gospel, and some local politicians even quoted it with relish in Parliament as proof positive of an economy in distress. (Exxon actually took a letter it had received from the Ghanaian government to Will Connors of The Wall Street Journal to plead for that scurrilous editorial, which of course was written entirely from Exxon-Kosmos’ view of events).

Surely, every country has the right and duty to protect its national interests, as the United States, for example, made abundantly clear in 2005 when it scuttled a proposed Chinese cash purchase of US oil company Unocal. In the end, Unocal, a private company, was forced by the US government to sell to a fellow American company for a combination of stocks and cash which was US$1.5 billion less than what the Chinese were willing to pay. US national interests won the day, free markets be damned! But when a small country like Ghana seeks to protect its national interest also, even in a less draconian fashion, the American big business-big-media mafia promptly embarks on a campaign of calumny and defamation to facilitate the easy appropriation of the country’s oil by the likes of Kosmos and Exxon. Not coincidentally (again), The Wall Street Journal’s February editorial was followed on March 26, 2010 by a story in another right-wing paper, The Washington Times, which got an “Africa scholar at the New York-based National Committee on American Foreign Policy” to say that “Ghana's recent actions toward foreign investors is ‘very worrisome,’ echoing what several other businessmen and scholars have said." The story continues: "He described the Kosmos case as ‘the most egregious,’ but not the only one.” What could be more egregious than a government forcing a private company to sell for less than what it would have received on the open market? And now along comes Forbes, June 9, 2010, in what appears to be a well-planned attack on mostly foreign governments that it considers to be unfriendly to US economic interests (Nicaragua, Venezuela, Zimbabwe, and, on the basis of Kosmos at least, Ghana; war-ravaged Liberia, whose reconstruction has been helped with Ghanaian technical assistance and money, comes one spot ahead of Ghana on Forbes’ list of infamy).

In the case of Ghana, the statistics used by Forbes were as misleading as they were fraudulent.The claim that Ghana has a trade deficit of US$3 billion is a case in point. As of the first quarter of 2010, Ghana’s trade deficit, according to the Bank of Ghana, was US$487 million, which, when annualized, would be about US$2 billion for 2010 – roughly the same as the US$2.21 billion for 2009. Typically, such deficits must be related to the size of the economy to have any policy meaning. In the first quarter of 2008, the trade-deficit-GDP ratio was 27.8%, falling to 17.2% in the first quarter of 2009, and then to 10.9% by the first quarter of 2010. Is this what Forbes calls mismanagement?

The magazine also claims that Ghana had an external debt of US$4.9 billion and was “struggling to pay bills”. In fact, the external debt, according to the Bank of Ghana, was slightly higher in the first quarter of 2010: US$5,438.77 million, or 29.7% of GDP. Most has gone into infrastructure development, espcially electricity and roads – a wise investment by any sensible measure. The combined public debt (domestic and external) was US$10,506.15 million (or 57.4% of GDP), better than the EU maximum of 60%, which many “better managed” economies have breeched much to their distress. Nor is it true that Ghana is struggling to pay its bills. In the first quarter of 2010, the servicing of Ghana’s debt accounted for 0.4% of GDP, a slight improvement over the corresponding period’s figure of 0.5% in 2009. This was mainly due to the stabilization of the cedi and its eventual appreciation against the US dollar, which means that government requires less cedis to pay down its debt. This is good economic management by any standard.

The article also claims that per capita GDP (or national economic output divided across the population) “fell 9% last year to $621.” But short-term dollar-denominated GDP as reported by Forbes reflects more of the variations in exchange rates than actual changes in domestic output or living conditions.

A halving of the cedi-dollar exchange rate by administrative fiat, for example, would double Ghana’s GDP on paper overnight without a corresponding increase in output or welfare; a doubling would have the opposite effect of reducing GDP statistically, but not in fact.

And this is in fact what has happened. In 2007, the cedi depreciated by only 2.1% against the US dollar; in 2008, as government spending increased in part to deal with the global financial meltdown that began in the US, the rate of depreciation shot up to 12.2%, and then to 25.2% in 2009, leading to a fall in dollar-based GDP in both years, although cedi-denominated GDP grew by 7.3% and 4.7% in each respective year. With a population growth of 2.0% and economic growth rate of 4.7% in 2009, real per capita GDP (that is, the actual goods and services available on average to each Ghanaian) increased by nearly 3.0%, contrary to Forbes’ dubious doomsday statistical decline of 9.0%.

And so as more oil is discovered, and the protection of the national interest becomes a moral imperative, we can expect more of such mercenary journalism from the likes of Forbes and The Wall Street Journal. Ghanaian journalists have a professional and moral duty to expose them at every opportunity.

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Democracy in Cameroon is very Expensive

Ghana's Cancer of Corruption

Join Africa for Democracy Now!!!

The people of Tunisia, Egypt, Libya, Djibouti, Cameroon, Gabon are demanding democracy, rule of law and jobs from their leaders. Since January protests have rocked North African states of Tunisia, Egypt and now Libya. Similar protests have also taken place in Cameroon and Gabon.

The protesters have embraced jet fighters, helicopter gunships, armoured carrier assaults, water cannons, tear gas and camel charge. Thousands have died and tens of thousands have been injured. We cannot watch quietly while a part of humanity is being brutalised. The people of Libya, Cameroon and Gabon need our support. They need our prayers,and our encouragement. Our silence means victory for the totalitarian regimes. Let's us support them. This is the time and opportunity to make a difference. Raise your voice against injustice, oppression and dictatorship. Let us support them Now!!!. Join and invite your friends to join.

POLITICIANS AND THE ROT IN GHANA'S HEALTHCARE SYSTEM

Ghana:The Bright Star that Failed to Shine

A protest message to African Leaders

A message to the Thieves & Tyrants in Africa

"But history offers a clear verdict:governments that respect the will of their own people are more prosperous, more stable and more successful than governments that do not.No country is going to create wealth if its leaders exploit the economy to enrich themselves, or police can be bought off by drug traffickers. No business wants to invest in a place where the government skims 20 percent off the top, or the head of the port authority is corrupt".PRESIDENT BARACK OBAMA

HAVE YOU HEARD OF AFRICOM?

WELL, LIKE COLONIALISM AND IMPERIALISM, AFRICOM IS THE NEW UNITED STATES MILITARY PROJECT THAT SEEKS TO ESTABLISH MILITARY BASES ACROSS AFRICA WITH THE SOLE PURPOSE OF SECURING AFRICA'S RESOURCES FOR THE BENEFIT OF US CONSUMERS.

The Question is : Have Africans fail to appreciate sufficiently the bitter pill they swallowed under colonialism? Have Africans forgotten so soon the human and societal damage wreaked on them by Europeans through centuries of slavery, genocide, economic exploitation, cultural manipulation and political domination? Lord A. Adusei

Black Agenda Report

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Stop Corruption

Corruption in Ghana

Cluster Map

African money stolen so far

Africa has lost $140 billion through corruption in the decades since independence, says Nigeria’s president, Olusegun Obasanjo. The huge sum, largely spirited away by leaders and their associates, was one of the main reasons why Africa’s poverty was so severe.

Other names mentioned by the French Weekly were President Henri Bedie of Ivory Coast, 2 billion FF (or $300 million); President Denis N'guesso of Congo, 1.2 billion FF (or $200 million); President Omar Bongo of Gabon, 0.5 billion FF (or $ $80 million); President Paul Biya of Cameroon, 450 million FF (or $70 million); President Haile Mariam of Ethiopia, 200 million FF (or $30 million); and President Hissene Habre of Chad,20 million FF (or $3 million). Bear in mind that this list does not reflect the actual amount of money stolen out of Africa by these dictators. Factually, the mentioned figures had changed significantly since the French Weekly article was published in 1997. There are now new African billionaires and millionaires, including indicted former Liberian President Charles Taylor, President Gabassinga Eyadema of Togo, former Liberian Warlord Alhaji Kromah, former Ghanaian dictator Jerry J. Rawlings, and the late President Samuel Doe of Liberia; a host of African government ministers would make an updated list. While returning funds stolen out of Africa is the right thing to do, efforts must be made by the West and responsible African governments {i.e. the government of Botswana, etc.} to alter international banking laws that will make it difficult for Africa's government officials and corrupt business personalities to transfer huge funds into western banks. The measure was first proposed following the September 11, 2001 attacks but was rebuffed by western financial institutions. Again, we need to revisit this issue: the terrorists could use the thieves in Africa's government Ministries to transfer money into western bank accounts—the money could be used at a later time for terrorists' activities.

(Paul Japheth Sunwabe) Paul Japheth Sunwabe (a native of Liberia) is a graduate student of World Politics at The Catholic University of America. He is also the co-founder and President of Freedom and International Justice, a Washington DC based inclusive political organization seeking democracy, social justice and economic reforms in Africa. For this and subsequent articles, please visit www.freedomjusticef54.org/articles/

A major shift in funding development in Africa is accelerating. Major donors have been urging African governments to eradicate corruption or face cuts in aid. (African Recovery, by Sam Chege)

Despite the country’s abundant natural resources, including copper, gold and diamonds, the people of the Democratic Republic of Congo continue to sink further into poverty. Meanwhile, Mobutu, the late president who died in 1997, amassed a personal fortune of $5 billion, which was deposited in Swiss banks. (CNN world news, September 7, 1997). After more than three years of legal wrangling, the Nigerian government has finally achieved a major breakthrough in it’s efforts to recoup a substantial amount of money looted by the former president, General Sani Abacha. The money was stored in Swiss bank accounts. Abacha, who died of an apparent heart attack in 1998, had been accused of stealing nearly $3 billion from state funds in a series of staggering revelations of how he and his immediate family personalized Nigeria’s treasury. (This DAY, May 30, 2002)

An excellent way to get rich quick is to be the ex-wife of an ex-president. This is what Mrs. Vera Chiluba is claiming from ex president Chiluba in her application to Ndola High Court: She wants US$2.5 billion in a lump sum, and claims she can prove he has the funds available. She also requires maintenance for their nine children, none of whom are in gainful employment. She also needs a share in 6 properties in Ndola and a commercial farm in Chi samba. Also she needs a new executive Mercedes Benz 500 (or 600), a new Land Cruiser, a new Nissan Patrol, drivers as well and a court order for the return of 400 cattle, sheep and goats which are still at State Lodge.This was taken from the Zambia Post and was also reported in The Zambia Society Newsletter compiled by the glamorous Maggie Currie. Are African presidents the only ones so clever in accumulating wealth so quickly? Even ex president Marcos of the Philippines didn’t get hold of such huge amounts in such a short time. (Elias Georgopoullos, Saturday, April 27, 2002 at 12:52:22 PDT)

The French journal, ‘L’Evenement du jeudi published an article stating that the president of Cameroon, Paul Biya, is worth more than $45 billion FCA, money gleaned from the sales of petroleum. Mr. Biya has not refuted these claims.(Post watch Fact File report by Ntemfac Ofeae, undated).

The late president Mobutu of the Democratic Republic of Congo holds the record for financial plunder and national ruin. It is estimated that he stole $4 billion, leaving the country poorer than he found it, with ruined infrastructure and no formal economy to speak of. A close second to Mobutu is the late dictator of Nigeria, Sani Abacha, whose rule left 70 percent of Nigeria’s 120 million people living on less than one dollar per day. In Kenya, the Daniel Arap Moi dictatorship must be given credit for the systematic destruction of what used to be Africa’s economic showcase from the 1960s through the 70s. The authoritative Africa Confidential put Moi’s external bank holdings at $3 billion. In the so-called Goldenberg scandal, the Moi regime bolted with an estimated $1 biliion from its own central bank (12 percent of the national’s GDP), setting off a spiral of inflation, economic stagnation, unemployment, crime, ruined agricultural sector and decaying public services. (Testimony on the social and political costs of the theft of public funds by African Dictators: US House of Representatives Committee on Financial Services by Michael Chege, University of Florida, May 9, 2002)

Recent surveys carried out by the World Bank in a series of developing countries to compare budget allocations to actual spending at the facility level have confirmed that resources are not allocated according to underlying budget decision. In Uganda and Tanzania, large parts of funds were diverted elsewhere or for private gain. (U4 Utstein Anti corruption resource website) Peter Machungwa, Home Affairs Minister, Godden Mandandi, Works and supply Minister were arrested on Tuesday night in connection with the disappearance of $2 billion in government funds.(Business Day, October 24, 2002) Paul Tembo, former deputy minister of Finance, was shot dead in his home hours before testifying in corruption trial of three cabinet ministers. (BBC News, July 9, 2001). Zambian police and politicians have been identified to be the worst corrupt elements in the country. (AllAfrica.com, March 1, 2001)

Other names mentioned by the French Weekly were President Henri Bedie of Ivory Coast, 2 billion FF (or 300 million); President Denis N'guesso of Congo, 1.2 billion FF (or 200 million); President Omar Bongo of Gabon, 0.5 billion FF (or $ $80 million); President Paul Biya of Cameroon, 450 million FF (or $70 million); President Haile Mariam of Ethiopia, 200 million FF (or $30 million); and President Hissene Habre of Chad, 20 million FF (or $3 million). Bear in mind that this list does not reflect the actual amount of money stolen out of Africa by these dictators. Factually, the mentioned figures had changed significantly since the French Weekly article was published in 1997. There are now new African billionaires and millionaires, including indicted former Liberian President Charles Taylor, President Gabassinga Eyadema of Togo, former Liberian Warlord Alhaji Kromah, former Ghanaian dictator Jerry J. Rawlings, and the late President Samuel Doe of Liberia; a host of African government ministers would make an updated list. While returning funds stolen out of Africa is the right thing to do, efforts must be made by the West and responsible African governments {i.e. the government of Botswana, etc.} to alter international banking laws that will make it difficult for Africa's government officials and corrupt business personalities to transfer huge funds into western banks. The measure was first proposed following the September 11, 2001 attacks but was rebuffed by western financial institutions. Again, we need to revisit this issue: the terrorists could use the thieves in Africa's government Ministries to transfer money into western bank accounts—the money could be used at a later time for terrorists' activities

Arap Moi's Loots

The Kroll report revealed an intricate network of companies that were used to transfer billions of shillings to foreign countries like the United Kingdom, Australia, Switzerland, the Cayman Islands and Brunei among other countries using shell companies and dummy trusts registered in safe havens. The report also revealed the individuals and wealthy families who were behind the siphoning of enormous amounts of money out of the country and the banks that were involved. The Kroll report described in detail the assets owned by various politically connected families and individuals in a total of 28 countries across the world including hotels and residences in South Africa and the United States, a 10 000 ha ranch in Australia,3 hotels in London, a 4million pound house in Surrey and a 2million pound penthouse flat in Knightsbridge

Mother Ghana

I love Ghana, my mother land. Ghana is my only home. I must protect its people, its culture, its peace, its economy and its democracy and our children's children so that future generations will live to enjoy every aspect of the country.

Yes there are many tribes, languages, dialects and cultures but we are all Ghanaians. There is no tribe but Ghana. There is no political party but Ghana. Peace and unity is what we need to build the country. Politicians and political parties will come and go but Ghana will remain. So if we build it well today, our children will live to bless us. Together we stand divided we fall.